Reflecting a sharp pullback in fuel prices, the Labor Department released a report on Wednesday unexpectedly showing a decrease in U.S. import prices in the month of August.
The Labor Department said import prices fell by 0.3 percent in August after climbing by an upwardly revised 0.4 percent in July. Import prices decreased for the first time since October of 2020.
The drop surprised economists, who had expected import prices to rise by 0.3 percent, matching the increase originally reported for the previous month.
The unexpected decrease in import prices came as prices for fuel imports plunged by 2.3 percent in August after spiking by 3.0 percent in July. The downturn was mostly driven by lower petroleum prices.
Excluding the steep drop in prices for fuel imports, prices for non-fuel imports still edged down by 0.1 percent in August after inching up by 0.1 percent in July.
Prices for non-fuel imports showed their first decrease since November 2020, as a drop in prices for non-fuel industrial supplies and materials more than offset higher prices for automotive vehicles, foods, feeds, and beverages, capital goods, and consumer goods.
“Looking ahead, import price inflation will remain sticky in the near term until pandemic disruptions are resolved, especially with major trade partners like China where activity has slowed amid strict virus containment,” said Mahir Rasheed, U.S. Economist at Oxford Economics.
He added, “However, decelerating import price inflation confirms that price dynamics will continue normalizing on fading base effects, softer domestic demand, and a steady dollar.”
Meanwhile, the report said export prices increased by 0.4 percent in August after jumping by a downwardly revised 1.1 percent in July.
Economists had expected export prices to advance by 0.5 percent compared to the 1.3 percent surge originally reported for the previous month.
Prices for agricultural exports showed a notable rebound, shooting up by 1.1 percent in August after tumbling by 1.7 percent in July.
The Labor Department said prices for non-agricultural exports also edged up by 0.2 percent in August after jumping by 1.4 percent in the previous month.
Compared to the same month a year ago, import prices in August were up by 9.0 percent, while export prices were up by 16.8 percent.
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